Almost Classical

Stimulus — oh, that's right, we now call it "growth policies — will not save Europe. How do we know? Because the countries in the greatest trouble were spending… and spending and spending some more. Spare the rod, spoil the child | TribLIVE : Johan Norberg, a senior fellow at the Cato Institute, summarizes the results: "From 1997 to 2007, government expenditures increased by around 6 percent annually in Spain, Portugal and Greece, while population remained mostly stable. Spending increased by 4 percent a year in Italy -- even while the economy shrank."  Consequently, "Between 2000 and 2010, Portugal increased its public debt as a share of GDP from 49 percent to 93 percent, France from 57 percent to 82 percent, Italy from 109 percent to 118 percent, and Greece from 103 percent to 145 percent," reports Norberg. How hard is this to figure out? There was no "austerity" even under conservatives in Europe, as I wrote in a previous blog entry. The U...

Many in the chattering class, especially the economists and politicians on the left, keep telling us "Austerity has failed!" No, austerity hasn't been tried. I won't even bother with links to Paul Krugman's near-daily calls for stimulus — and inflation — in Europe, which would require a complete disregard for European experiences and German biases towards savings and low-inflation. Such economic arguments are beyond silly: convince Germans that an 11 percent savings rate is a bad idea? Really? Cause inflation in the hopes it will force Germans to spend money? Krugman and other economists can suggest these solutions because they know, they must know, that German citizens are not about to go on a spending binge and buy Greek, Spanish, or Italian goods. Yes, Germans really do save more than 11.4 percent of their income. And for ten years, Germany employed true austerity and labor reforms. They loosened labor restrictions (compared to the rest of Europe), slowed...

Wealth will move to avoid taxes. Eduardo Saverin, the billionaire co-founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill. — http://www.bloomberg.com/news/2012-05-11/facebook-co-founder-saverin-gives-up-u-s-citizenship-before-ipo.html This year, nearly 2,000 U.S. expatriates have renounced citizenship, more than in the previous 25 years. The top 0.1% now average four nations of residency (eight weeks or more per calendar year), so they can and do move from home to home with ease. Rich Americans renouncing U.S. citizenship rose sevenfold since UBS AG (UBSN) whistle-blower Bradley Birkenfeld triggered a crackdown on tax evasion four years ago. About 1,780 expatriates gave up their nationality at U.S. embassies last year, up from 235 in 2008, according to Andy Sundberg, secretary of Geneva's Overseas American Academy, citing figures from t...

Today, my wife and I will be moving in to our new house. This means we will be without an Internet connection for two or three days, so I won't be online until the weekend or early next week. Also, moving doesn't leave much time to be online for the next week or so. To make matters more complicated, I have a medical procedure in the middle of the day. I started this morning packing boxes, trying to get what I can done before the out-patient procedure. You never know how long it will take to recover from the anesthesia and general discomfort when you have any medial procedure. The notion of being off-line, disconnected from readers and friends, is a little frustrating. What does that say about our culture and our strange need to be connected at all times? It's as if we don't exist without a network connection. Last year, I tried to have at least one "tech free" day a week. This didn't mean no phone, but it meant no sitting at a computer and working...